Oil Context Weekly (W16)
Crude prices rose following new US sanctions on Chinese importers of Iranian crude, supported fundamentally by physical prompt purchases while paper barrels caught a bid as hot money returned to oil
Happy Thursday, Oil Watchers!
Releasing Oil Context Weekly a day early given the market holiday tomorrow—hope you all have a fantastic Easter weekend.
Every week, I summarize and analyze developments in flat crude prices, calendar spreads, high-frequency inventories, refined products, and positioning data, as well as a taste of the themes I’ve been thinking about or following closely.
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Summary
Flat Prices rallied nearly $3/bbl for Brent to finish this short week just shy of $68/bbl, driven by both fundamental pressure from prompt physical buying as well as a return of recently liquidated hot money flows.
Timespreads strengthened even more than flat prices, with Brent prompt spreads rising from less than 60c of backwardation to end above 90c/bbl and all major benchmarks seeing steeper front-end spreads; crude futures curves tilted back higher after the belly of the curve fell into contango last week.
Inventories data was mixed between a counter-seasonal draw in the US—driven by both slower-than-usual crude builds and stronger-than-typical declines in transportation fuels—and a sizable build in ARA Europe that reversed what had been a deepening counter-seasonal drawing trend.
Refined Products markets remain rangebound around typical seasonal crack spread levels, with most of the directional and speculative volatility largely isolated to the crude market.
Market Positioning data from the CFTC and ICE are delayed this week due to the Good Friday holiday.
As Well As US tariffs hit global demand growth forecasts, OPEC releases new compensation cut guidance, Iranian oil faces new US sanctions amidst ongoing nuclear negotiations, the Keystone Pipeline returned to service, more Canadian crude flowing to China as US share falls, Brazilian exports hit all-time highs over past month, and EIA data under threat from Trump admin downsizing.